Is Lockheed Martin readying to offload ATM?

News that Lockheed Martin could be about to either sell or spin off its ATM unit as part of a strategic review of its government services business has thrown up some intriguing possibilities.

The five business units which are under review represent roughly $6 billion in expected sales this year and employ more than 17,000 people.

“As global security market dynamics shift, this review will strengthen our competitive posture, enabling sustained, profitable growth and positioning Lockheed Martin to deliver value for customers, shareholders and employees,” said Lockheed Martin CEO Marillyn Hewson at the business’ second quarter financial results.

Hewson said the strategic review will be completed this year and ‘could result in one or more transactions’ involving the targeted units. “There are a number of possible scenarios,” she told analysts.

Lockheed Martin’s En Route Automation Modernization (ERAM) system finally replaced the Host computer system in April and is now the operations backbone at 20 of the Federal Aviation Administration’s (FAA) area control centres.

Industry sources tell Air Traffic Management that while the business could well decide not to sell any part of its IS&GS businesses, the potential impact of an acquisition of its ATM unit on existing industry players – either existing FAA system suppliers or companies wanting  to expand from aircraft flight management into ATM – is interesting.

“If Lockheed Martin sold its ATM unit to Raytheon, Northrop Grumman or General Dynamics it would just change the brand on top of ERAM but not change much for the FAA or for NextGen,” said one industry source. “If however it sold to Thales it would make it a major new player in the US/FAA market where Thales has so far been mostly limited to CNS ground station equipment.”

“Should Lockheed Martin’s ATM unit be sold to Harris it would enable the NextGen ATM system development to be closely integrated with the ex-Exelis ADS-B network and Harris Data Comm network while a sale to Boeing, GE Aviation or perhaps even Honeywell would have a revolutionary impact on NextGen by making the development much more aircraft centric.”

“It will be interesting to see if it sells the different units to separate buyers. If Lockheed Martin insisted on selling it all to one buyer, the likely buyers would be different,” another source said.

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